21Vianet Group Inc. Stock Falls 14% -- Here's What Happened

What: Shares of data center company 21Vianet Group (NASDAQ: VNET) fell as much as 14.3% following its second-quarter earnings report, which was released on Tuesday after market close. At the time of this writing, the stock is down about 12.6% during the trading day.

Continue Reading Below

The stock's sell-off on Wednesday was likely driven by the company's worse-than-expected adjusted loss per share.

Image source: 21Vianet.

So what: 21Vianet reported revenue of 910.8 million RMB, or $137.2 million, rising 5.1% from the year-ago quarter. The company's adjusted loss per share was $0.17.

More From Fool.com

These results were mixed compared to analysts' expectations. On average, analysts were expecting 21Vianet to report revenue and EPS of $128.2 million and a loss of $0.09 per share, respectively.

Advertisement

21Vianet Group CEO Steve Zhang admitted in the company's second-quarter press release that 21Vianet experienced "headwinds in certain markets," but said the company is "pleased to report that core business areas, including IDC, Cloud and VPN gained solid growth momentum in the second quarter."21Vianet's worse-than-expected loss is likely related to the company's pricing pressure in its managed network services, which CFO Terry Wang said "continued to limit our top line growth" in the segment.

Now what: Going forward, Wang asserts the company is making progress on its cost-control efforts -- a feat he believes will play a role in helping "reignite margin growth going forward," he said.

"[W]e are pleased with our operations team's progress on cost control front," Wang said, "which is yet to be fully reflected in our quarterly financial results and should yield positive results in the coming quarters."

A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.